When the time comes to get a loan, many individuals are surprised to learn that the bank won’t lend to them due to a low credit score. While no credit check loans are possible regarding some criterias, these short-term loans tend to be for lower-dollar amounts — hardly what you need when buying a home or making another major purchase. To qualify for larger loans, you need to take steps to improve your credit score, and you need to start now. Here’s how you can achieve positive change.

1. Make On-Time Payments

It sounds surprisingly simple, yet many people fail to pay their bills on time. This can have a disastrous effect on your credit score, especially if you start making late payments on your credit card or other loans.

Failure to pay utility bills or rent could ultimately get a collection agency involved, resulting in a serious black mark on your credit score. To avoid these issues, make sure you pay bills on time, every time. If you have trouble remembering due dates, consider setting up automatic payments.

2. Lower Your Credit Card Balance

Your credit card’s maximum balance may allow you to carry several thousand dollars on the card, but this doesn’t mean you should. In reality, you should try to keep your balance below 30% of the available amount.

For some, this requires a change in spending habits. By reducing your monthly expenditures, you can keep your balance low. If you’ve accrued a high utilization rate, pay off as much as you can to gradually lower your balance and minimize interest fees.

3. Check Your Credit Report

When obtaining a loan, lenders will get your credit score from a major credit bureau. These bureaus track all information related to your credit history to calculate a score that will directly influence whether you qualify for a loan.

However, this tracking and reporting process isn’t perfect. It isn’t unusual for an error to be present in the report. You should periodically check your report yourself, investigating for any mistakes, such as applications or accounts you don’t recognize, accounts not getting reported, or even inaccurate personal information. Fixing these mistakes can provide a much-needed boost to your score.

Parting Thoughts

As your credit score improves, you’ll be better positioned to reach your other financial goals. Whether you’re saving up to buy a home or simply wish to be prepared for a rainy day, making these wise changes to your financial habits now will pay big dividends in the future.